Mild price gains in gold as market pauses

NEW YORK (March 12) Gold prices are up a bit in early U.S. trading Thursday, as the market pauses while traders weigh the bullish aspect of major geopolitical uncertainty against the bearish elements of a strong U.S. dollar, rising bond yields and increased worries about inflation preventing near-term interest rate cuts. Silver prices are posting decent gains. April gold was last up $2.00 at $5,181.10. May silver prices were up $1.56 at $87.085.

Latest on the war in Iran.

• Oil tankers attacked off Iraq as Middle East crisis worsens
• Dubai reports a number of drone attacks, with injuries reported from one
• Port in Oman resumes normal operations after halting for several hours
• The war is causing the largest oil-supply disruption ever, the IEA says
• U.S. to release 172 million barrels of oil for IEA relief plan
• IEA says global oil supply to fall by 8 million b/d in March—lowest since 2022
• Global bonds erase 2026 gains as war fuels inflation angst
• Iran says truce depends on U.S., Israel pledging not to strike
• India in talks with Iran to secure safe passage for tankers
• European gas prices follow oil higher as shipping crisis worsens

The Iran war has sparked the biggest crude oil disruption in history. Global oil markets are suffering “the largest supply disruption in history” as the war in Iran drives production to the lowest level in four years, the International Energy Agency said in a report today. Gulf producers had cut oil production by at least 10 million barrels a day because the Strait of Hormuz is almost impassable to shipping, it said. The IEA expects world output to fall by 8 million b/d in March as a result. This represents a decline of more than 7 percent from the roughly 107 million b/d produced in February. Big supply reductions have been seen in Iraq, Qatar, Kuwait, the UAE and Saudi Arabia, but declining production in the Gulf would be partly offset by increased output from Kazakhstan and Russia and by non-OPEC+ producers, said the IEA. Saudi Arabia and the UAE are rerouting some of their exports through ports outside the Gulf. Saudi Arabia hit a record daily level of exports through its western ports of 5.9 million b/d on March 9, said the IEA. In 2025, flows through this route were just 1.7 million b/d.

U.S. launches Section 301 probe against its major trading counterparts. The Trump administration has started the first of several sweeping trade investigations that set the stage for new tariffs, the centerpiece of a push to replace levies struck down by the U.S. Supreme Court. U.S. Trade Representative Jamieson Greer announced Wednesday that his office would begin a probe into more than a dozen major economies under Section 301 of the Trade Act focused on alleged excess manufacturing capacity. “The investigations, which typically take months to complete, are required for the president to unilaterally place duties on imports from specific countries deemed to employ unfair trading practices. Economies that will be subject to the inquiry include some of the U.S.’s largest trading partners: China, the European Union, Mexico, India, Japan, South Korea and Taiwan. Switzerland, Norway, Indonesia, Singapore, Thailand, Malaysia, Cambodia, Vietnam and Bangladesh will also be investigated,” said a Bloomberg report. “Our view is that key trading partners have developed production capacity that is really untethered from the market incentives of domestic and global demand,” Greer said during a telephone briefing for reporters. Canada was not among the initial batch of targeted countries.

The key outside markets today see the U.S. dollar index slightly higher, with Nymex crude oil prices up and trading around $91.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.23 percent.

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